Thoughts

Sink or Swim: Leadership Challenges for High Tech Businesses in the 21st Century

In the demanding world of Equity funded organisations one third of Venture Capitalists give their CEOs less than a year to prove themselves, whilst less than a tenth of company founders can expect to remain in charge of their businesses after Venture Capital investment; so rang headlines in the Financial Times in February 2008. Based on research, commissioned by the European Leadership Programme (ELP), a London based forum for CEOs of venture or private equity backed businesses, 52 UK based venture capitalists,1 gave their views on all aspects of the life cycle of the CEO. Ashley Ward, a founder of the ELP, says, “many companies bring in a new CEO in the hope that they can turn around an underperforming business, but this often doesn’t solve their problems.” The requirement for better qualified Boards, a support network of experienced experts, and leadership education that is practical and specific to the needs of high tech CEOs are just three pre-requisites for success, often measures that many venture capitalists fail to realise.

This article will explore the latter of the three criteria, the need for appropriate, hard edged leadership education equipped with management tools designed to address the challenges of 21st Century Leadership in hightech companies; fast moving, multi-cultural, adaptive, and overwhelmingly results orientated.

Aline Wolff, an Associate Professor at Stern Business School at New York University, states that leadership skills sought after by employers are the single most important capability, but too much business curriculum is invested in financial theory, quantitative reasoning, and almost exclusively ‘left-brain’ thinking. An emphasis on building the capability to manage and lead inenvironments that are constantly changing, to create and develop vision, interpersonal communication and team skills, and working with global diversity are fundamental. “If we continue to measure success on day-to-day stock prices and quarterly earnings – there is no room for vision. If we applaud student abilities to create spreadsheets rather than to question whether spreadsheets are necessary our students will not have vision,” says Dr. Wolff Amidst MBA programmes in the United States, 70% don’t have any courses on creative thinking or innovation. “People who can make connections across knowledge gaps have a competitive advantage, because they see new combinations and alternative ways of doing business.” 2

Whilst there has been unparalleled growth in innovative new products and technologies, the field of innovation in management has been scarce.

1.On behalf of the European Leadership Programme, Vanson Bourne researched attitudes of 52 European Venture Capitalists on their views on all aspects of the lifecycle of a CEO.
2. Ron Burt – Hobart Williams Professor of Sociology and Strategy at Chicago School of Business.

Businesses largely operate with “old paradigms” of management thinking that were designed for the industrial age. These beliefs are often unconscious and unquestioned yet the behaviours, processes and ways of working that they spawn can be the very things that stifle creative thinking, entrepreneurship and sustainable competitive advantage. Management itself needs innovation.

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Author – Natalie Turner CEO of ENTHEO LTD an Innovation management and change business based in the UK. natalie.turner@entheo.co.uk

Contributors:
Ashley Ward – The European Leadership Forum www.european-leaders.com
Dr. Gilles Spony – Futuretobe www.futuretobe.net
Dr. Aline Wolff – Stern Business School www.stern.nyu.edu
CEO – John Aalbers – Volubill www.volubill.com
CEO – Francois Mazoudier – Go Hello www.gohello.com

*Interview with Francois Mazoudier, CEO GoHello